Validity of E-TDS Return Late Filing Fee U/s 234E

Fee charged for late filing of TDS return isn’t a tax; HC upholds constitutional validity of sec. 234E

The fee sought to be levied under section 234E is not a tax that is sought to be levied on the deductor. The provisions of section 234E is not onerous on the ground that the section does not empower the AO to condone the delay in late filing of the TDS return, or that no appeal is provided for from an arbitrary order passed under section 234E

Facts :

a) Petitioner, a practicing Chartered Accountant, challenged the constitutional validity of section 234E. Section 234E seeks to levy a fee of Rs.200/- per day (subject to certain other conditions) inter-alia on a person who deducts Tax at Source and then fails to deliver or cause to be delivered the TDS return to the authorities within the prescribed period.

b) He argued that legislature had categorically termed the levy under section 234E of the Act as a “fee”, it necessarily could be levied only in the event the Government was providing any service. In the absence thereof, the said section seeks to collect tax in the guise of a fee. This, according to the learned counsel, was impermissible either in common law or under the taxing statute, and encroached on the rights of life and liberty of the citizens.

c) He further submitted that the provisions of section 234E were extremely onerous as the AO was not vested with any power to condone the delay in filing the TDS return and there was also no provision of appeal against order of AO.

The High Court upheld the constitutional validity of Section 234E and made following observations:

1) There is an obligation on the Income Tax Department to process the income tax returns within the specified period. Department cannot accurately process the return until information of TDS is furnished by the deductor within the prescribed time.

2) If the income tax returns having refund claims were not processed in a timely manner, it would result in delay in issuing refunds or raising of infructuous demands. Late payment of refund also affects the government financially as the Government has to pay interest for delay in granting the refunds.

3) The Legislature took note of the fact that a substantial number of deductors were not furnishing their TDS returns within the prescribed time frame which was absolutely essential. This led to an additional work burden upon the Department due to the fault of the deductor by not furnishing the TDS returns in time. It was in this backdrop, and to compensate for the additional work burdened upon the Department, that a fee was sought to be levied under section 234E. Thus, section 234E is not punitive in nature but a fee which is a fixed charge for the extra service which the Department has to provide due to the late filing of the TDS statements.

4) A right of appeal is not a matter of right but is a creature of the statute, and if the Legislature deems it fit not to provide a remedy of appeal, so be it. Even in such a scenario it was not as if the aggrieved party was left remediless. Such aggrieved person could always approach this Court in its extra ordinary equitable jurisdiction under Article 226 / 227 of the Constitution of India, as the case may be. Therefore, we do not agree with the argument of the Petitioners that simply because no remedy of appeal was provided for, the provisions of section 234E were onerous. – Rashmikant Kundalia v. Union of India (2015) 54 taxmann.com 200 (Bombay)

Telangana VAT – Informers’ Network

The commercial taxes department has set up its own “informers’ network” along the lines of the police department, to check evasion of commercial taxes in Telangana. The department even offers incentives of up to Rs 50,000 to informers who give correct information on tax evasion by commercial establishments.

Source : http://www.deccanchronicle.com/141225/nation-current-affairs/article/informers-report-tax-fraud-telangana

ST3 Return For H1 FY 2014-15 Due Date Extended

ORDER NO. 02/2014 – SERVICE TAX

In exercise of the powers conferred by sub-rule (4) of rule 7 of the Service Tax Rules, 1994, the Central Board of Excise & Customs hereby extends the date of submission of the  Form ST-3  for the period from 1st April 2014 to 30th September 2014, from 25th October, 2014 to  14th November, 2014.

TDS Return For Q2 FY 2014-15 Due Date Extended

Last date of filing of the TDS/TCS Statements for the 2nd Quarter of Financial year 2014-15 for the deductors/collectors in the States of Andhra Pradesh, Jammu & Kashmir, Odisha & Telangana extended.

Government deductors/collectors : Extended from 31st October, 2014 to 7th November, 2014

All other deductors/collectors       : Extended from 15th October, 2014 to 31st October, 2014

CIN Changed w.e.f 02-June-2014

All Public and Private Limited Companies personnel please make a note that on account of Re-organisation of Andhra Pradesh and formation of Telangana your Company’s CIN has been changed (the letters “AP” replaced with “TG”).

The new CIN HAS TO BE COMPULSORILY mentioned on all Invoices, Letter Heads and any other similar Documents as per recent Circular.